Western Canadian flax prices have lost close to $1 per bushel in recent weeks, and the trend is expected to continue leading up to harvest, according to Kevin Silzer, broker at Rayglen Commodities in Saskatoon.
“I think flax has been following the general markets right now,” he said. “There’s also a little bit of pressure coming from the Black Sea region. I talked to a couple of buyers and Ukraine and Russia have been shopping their flax around to buyers here.”
The Black Sea region has also increased its exports to Europe in recent years, taking market shares away from Canada.
Although it hasn’t affected the market yet, the prospect of an above-average crop in top grower Saskatchewan could weigh on prices come harvest, Silzer said.
According to the Saskatchewan ag ministry’s weekly crop progress report released Aug. 1, the flax crop is rated as 88 per cent good-to-excellent in condition, 11 per cent fair and one per cent poor.
“I would say the crop is looking above average,” Silzer said. “We are expecting larger production than last year in Saskatchewan.”
Besides favourable growing conditions for this season’s crop, the larger production expectations are also due to the increased acreage. A Statistics Canada report released earlier in the year showed Canadian flax acreage had jumped from 980,000 acres in 2012-13 to 1.135 million acres in 2013-14.
Saskatchewan alone seeded 960,000 acres, or about 84 per cent of Canada’s flax crop.
However, one bullish factor that could stabilize or push the market higher before harvest: the possibility of frost.
The combination of late seeding and recent cool weather throughout the Prairies has some farmers concerned about the prospects of early frost hurting crops late in the growing season.
“It hasn’t happened yet, but there are a little bit of worries from growers about frost,” Silzer said. “That’s the big issue and question mark. Because seeding was a little late, if frost comes early and we haven’t filled that flax crop yet, it could be a major issue.”
Prairie Ag Hotwire on Friday had FOB farm new-crop flax prices topping out at $14 per bushel.
— Brandon Logan writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.